New Hampshire Finds No Hospital Medicaid Cost Shifting

Need cheap outpatient hospital care? In New Hampshire, look for a half-empty hospital with many Medicaid plan enrollees.(AP Photo/Petros Giannakouris)

Low Medicare reimbursement rates may have more of an effect on the prices New Hampshire hospitals charge commercial plan enrollees than Medicaid reimbursement rates do.

Researchers at the University of Massachusetts Medical School Center for Health Law and Economics come to that conclusion in a hospital cost-shifting report released by the New Hampshire Insurance Department.

The researchers found that, before they adjusted for the severity of patients' cases, prices at the most expensive hospitals were about 3 times as high as at the cheapest hospitals.

When the researchers adjusted for severity, the severity-adjusted prices at the most expensive hospitals were about twice as high as the prices at the cheapest hospitals.

The cost of an inpatient casemix-adjusted discharge ranged from $6,175 to $13,415.

The cost of an outpatient casemix-adjusted discharged ranged from $343 to $731.

Costs at high-quality hospitals were comparable to costs at low-quality hospitals, but hospitals with high occupancy rates and high percentages of patients with commercial coverage seemed to charge more than other hospitals.

"One reason for this finding may be that hospitals that have higher demand for their beds may command higher prices from insurers," the researchers say.

Having a high percentage of Medicaid patients had no significant effect on overall inpatient prices, but hospitals with large percentages of Medicaid patients offered much lower outpatient prices than other hospitals did, the researchers found.

"Hospitals with a higher public payer mix likely utilize a variety of strategies to compensate for lower public prices, including accepting reduced margins or reducing their costs," the researchers say.

The UMass also looked at the correlation between the amount of free care a hospital provided for the uninsured and the prices it charged insured patients.

New Hampshire hospitals wrote off about 2009 discharges as charity care, the researchers say.

The researchers' analysis "showed no correlation between the hospital inpatient price per [casemix-adjusted discharge] and each hospital's percent of uninsured charges," the researchers say.

About half of the hospitals that treated an above-average percentage of uninsured patients charged above-average prices and about half charged below-average prices, the researchers say.

Similarly, at least in New Hampshire, "the analysis did not indicate any significant relationship between the number of total beds or occupied beds at a hospital and its commercial price per [casemix-adjusted discharge," the researchers say.